CBRE: Consumer spending drives real estate developments in 2016
This year is expected to be a solid one for the real estate sector with the pace of growth in Hungary and the rest of the CEE surpassing that of Western Europe, CBRE said in its “CEE Market Outlook” released yesterday.
The report referred to Hungary as an economy supported by cheap energy, low interest rates and relatively low exposure to the slowdown in China with a GDP growth of 2.9% in 2015. From a property market perspective this translates as strong household consumption that will inevitably impact retail markets. In fact tenant turnover has already increased significantly, in some cases in double digits, according to the report.
Growth in the automotive sector has also proven beneficial in the development of industrial properties and the expansion of ICT services, which are expected to dominate the Budapest office scene, CBRE said. The report also noted that office demand was already up 51% year-on-year.
Cautious developers have helped improve rental outlook for property owners, according to CBRE, adding that a strong occupational market and more affordable financing, could lead to the compression of yield levels, which are currently quite high as compared to other core Central European markets, the report added.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.